What does Schedule paragraph 6 of the Small Charitable Donations Act 2012 require?

Schedule paragraph 6 requires that a qualifying small donation must not be an amount the donor is entitled to deduct when calculating their income for income tax purposes. This ensures the donation is a genuine gift from the donor's after-tax resources, preventing the same payment from generating both a tax deduction and a charity top-up payment.

Why does paragraph 6 prevent deductible payments from qualifying as small charitable donations?

The provision prevents double tax relief. If a donor already claims a payment as a deductible business expense, reducing their tax liability, allowing the charity to also claim a top-up payment on the same amount would create a double tax advantage. Paragraph 6 ensures only genuine after-tax gifts qualify for the scheme.

Do most ordinary cash donations from individuals meet the paragraph 6 condition?

Yes, the vast majority of small cash donations and contactless card donations made by members of the public to charities satisfy this condition. Personal gifts to charity are not ordinarily deductible expenses for income tax purposes. The condition is most relevant where payments are made in a business or professional context.

When is paragraph 6 most likely to disqualify a donation from the small donations scheme?

Paragraph 6 is most likely to apply where a payment is made in a business or professional context and could be treated as an allowable expense. For example, if a self-employed person pays a charity for a service and claims it as a business expense, that payment would not qualify as a small donation for top-up purposes.

Small Charitable Donations Act 2012 section Schedule para 6

The gift must not be deductible in calculating the individual's income

Schedule paragraph 6 sets out a condition that a small charitable donation must not be one that the donor can deduct as an expense when calculating their taxable income.

A small donation only qualifies for a top-up payment if it is a genuine gift from the donor's after-tax resources
If the donor can claim the amount as a deductible expense against their income for income tax purposes, the donation does not qualify
This prevents a double tax benefit — where the donor gets a tax deduction and the charity also receives a top-up payment on the same amount
Charities should be aware that most ordinary cash donations from individuals will meet this condition, as personal gifts are not normally tax-deductible expenses

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